In general, students’ investment in college pays off with higher long-term earnings. But a new report from Georgetown University’s Center on Education and the Workforce (CEW) shows the importance of institution and degree type, identifying 1,233 colleges and universities where most of their students earn less 10 years after enrolling than peers who have only a high school degree.
College largely worth it—but ROI not guaranteed
The new report uses updated data from the Department of Education’s College Scorecard to rank 4,500 U.S. colleges and universities and builds on a similar 2019 CEW analysis of college students’ short- and long-term return on investment (ROI). CEW has made the results available in an online tool, which allows users to sort institutions by metrics such as tuition, median student debt and earnings, and the share of students who have earnings greater than high school graduates 10 years after enrollment.
On average, 60 percent of students across all postsecondary institutions earn more than peers with just a high school degree a decade after enrolling. However, at 30 percent of institutions, more than half of students earn less than high school graduates after 10 years. Referencing prior research, CEW says those poor outcomes could reflect a combination of low graduation rates and disparities in earnings related to gender, race, and ethnicity.
Private four-year colleges tend to pay off in the long run
Echoing CEW’s 2019 report, the new analysis shows that bachelor’s degree programs at private colleges provide students with a higher return on investment 40 years after enrollment than certificate or associate’s degree programs. However, two-year colleges have the highest ROI at the 10-year mark, in part because students need fewer credits to graduate, and thus take on less debt and enter the workforce sooner.
Looking at institution type, CEW found that students at public colleges tend to pay lower tuition and take on less debt than those at private institutions and thus showed greater ROI. However, “the return on privates picks up later in your career,” Martin Van Der Werf, CEW’s director of editorial and education policy, told Inside Higher Ed. “Privates generally have higher graduation rates, but they also are costlier and people have taken out loans to go there, so the net cost is always higher.”
Crucial to make informed college decisions
Pointing to the variation in ROI by institution, program, and credential types, CEW Director Dr. Anthony P. Carnevale said in a release that the report shows that “It’s important to inform people about the risk of taking out loans but not graduating, which could leave them without the increased earnings that would help them repay those loans.”
“We need a comprehensive career counseling system to help students and their families use this information to make decisions about college,” added Van Der Werf.